ORDER TO CEASE AND DESIST AND ORDER TO SHOW CAUSE WHY RESTITUTION, CIVIL PENALTIES, AND COSTS SHOULD NOT BE IMPOSED

On May 17, 2011, the Enforcement Section of the Securities Division of the Office of Secretary of State (the “Enforcement Section”), through the Securities Division’s Acting Chief Enforcement Counsel, Kristine Sonnett Kauflin, submitted a Petition for Order to Cease and Desist and Order to Show Cause Why Restitution, Civil Penalties, and Costs Should Not Be Imposed. After reviewing the petition, the Commissioner issues the following findings of fact, conclusions of law and order:

Spectrum Pet Care, Inc. (“Spectrum Pet Care”), was a Delaware corporation, authorized to transact business in Missouri, with a last known address of 1000 Lewis Street, Montgomery City, Missouri 63361. Spectrum Pet Care was organized by its president, Renick, for the purpose of manufacturing pet foods. This company was administratively dissolved in December 2010.

Spectrum Pet Foods, Inc. (“Spectrum Pet Foods”), was a Missouri corporation with a last known address of 1000 Lewis Street, Montgomery City, Missouri 63361. Spectrum Pet Foods was organized by its president Renick for the purpose of manufacturing, selling, and distributing pet foods and related products. This company was administratively dissolved in February 2004.

Consolidated Food Group, Inc. (“CFG”), is a California corporation with an address of 2173 Salk Avenue, Suite 250, Carlsbad, California 92008. CFG was formed on December 30, 2010. Renick is the president of CFG.

Spectrum Pet Care California, Inc. (“Spectrum CA”), is a California corporation with an address of 2173 Salk Avenue, Suite 250, Carlsbad, California 92008. Spectrum CA was formed on December 20, 2010. Renick is the president of Spectrum CA.

Renick has a home address of 200 Highway RB, New Florence, Missouri 63363. Renick has never been registered to offer or sell securities in Missouri.

[1] SPC Brands, Inc., Spectrum Pet Care, Inc. and Spectrum Pet Foods, Inc. are a group of affiliated corporations under common ownership and control, and are operated as a single entity without regard to their corporate separateness.

ePetFood.com was a Missouri corporation with a last known address of 1000 Lewis Street, Montgomery City, Missouri 63361. This company was dissolved in September 2001. Renick continues to use the email address frank@epetfood.com for Spectrum-related business.

Renick Reptiles, Inc. (“Renick Reptiles”), is a Missouri corporation. Benjamin B. Renick (“Ben Renick”), the son of Renick, is the president of Renick Reptiles, which was formed for the purpose of developing “internet based technology.”

As used herein, the term “Respondents” refers to Spectrum, CFG, and Renick.

In or around December 2000, a fifty-six (56) year-old resident of Nixa, Missouri, (“MR1”) learned of Spectrum Pet Foods investment opportunity in a newspaper advertisement.2

MR1 met Renick at a hotel located in Springfield, Missouri, to discuss an investment opportunity in Spectrum Pet Foods stock.

Renick told MR1, among other things, the following:

that Spectrum Pet Foods made natural and organic pet food and treats;

that Spectrum Pet Foods would “go public” within the next year;

that the value of Spectrum Pet Foods stock would double when it went public;

that the stock could be sold back to Spectrum Pet Foods at any time;

that the stock was a “bargain;” and

that the investment of MR1’s retirement funds into Spectrum Pet Foods was a “good deal” for MR1.

On or around January 1, 2001, MR1 invested one thousand five hundred dollars ($1,500) in Spectrum Pet Foods common stock. MR1 was issued a stock certificate by Spectrum Pet Foods.

[2] The Enforcement Section does not have a copy of the advertisement that MR1 read, but MR1 recalls the advertisement discussed an investment opportunity in Spectrum stock and instructed individuals interested in investing to meet Renick at a hotel located in Springfield, Missouri.

Between January 1, 2001, and June 30, 2010, MR1 invested at least an additional nine hundred dollars ($900) into Spectrum Pet Foods stock.

On or around July 1, 2003, Spectrum Pet Care issued a new stock certificate to MR1 to replace the certificate issued by Spectrum Pet Foods.

Prior to June 2010, MR1 contacted Renick requesting to liquidate MR1’s stock in Spectrum Pet Care. Renick told MR1 that Spectrum could not pay MR1 because Spectrum had not “gone public.”

In or around June 2010, MR1 spoke with Renick on the telephone. MR1 told Renick that MR1 had filed a complaint with the Enforcement Section.

After the June 2010 telephone call, MR1 received a check from Spectrum Pet Care for two thousand five hundred dollars ($2,500).

In or around December 2000, a sixty-two (62) year-old resident of St. Louis, Missouri, (“MR2”) received correspondence from Spectrum Pet Foods regarding an investment opportunity.

Renick told MR2, among other things, the following:

Spectrum Pet Foods manufactured pet food;

the business would “go public;” and

MR2 would receive a 10% return on the investment.

On or around December 30, 2000, MR2 invested twenty thousand dollars ($20,000) in Spectrum Pet Foods common stock.

On or around December 30, 2000, MR2 signed a subscription agreement which stated, among other things, the following:

four thousand (4,000) shares were issued at a value of five dollars ($5) per share; and

In or around July 2007, Renick and MR2 discussed an investment by MR2’s corporation (“MC”) in Spectrum Pet Care bonds.

[3] The Enforcement Section does not have a copy of the advertisement that MR1 read, but MR1 recalls the advertisement discussed an investment opportunity in Spectrum stock and instructed individuals interested in investing to meet Renick at a hotel located in Springfield, Missouri.

Renick told MR2, among other things, the following:

Spectrum Pet Care was in the process of raising two million five hundred thousand dollars ($2,500,000) to install two new product lines;

the pet treat business had “exploded” and Spectrum Pet Care could not keep up with demand for the product;

Spectrum Pet Care would “go public;”

Spectrum Pet Care would make millions of dollars when Spectrum Pet Care went public;

the term of the bond was twelve months;

all interest on the investment would be paid at the maturity date of the bond;

a UCC filing would be made in the investor’s name at the state and county levels;

the bonds of Spectrum Pet Care were fully secured by “equipment and five acres of industrial property;” and

bondholders have the ability to convert their bonds to stock in Spectrum Pet Care at any time for below-market prices.

On or around July 18, 2007, MR2 met with Renick and made a twenty-five thousand dollar ($25,000) investment for MC in a Spectrum Pet Care bond.

MR2 signed a subscription agreement for MC which stated, among other things, the following:

the annual percentage yield on the bond was ten percent (10%); and

the interest payment and principal was due at maturity.

Renick failed to disclose to MR2 and MC, among other things, the following:

that Renick was not registered in the State of Missouri to sell securities;

that the bond was not registered in the State of Missouri; and

that Spectrum Pet Care was in "survival mode" during the years 2006, 2007, and 2008.4

On August 26, 2008, approximately a month after MC’s Spectrum Pet Care bond matured, Renick mailed a letter to MR2. The letter stated, among other things:

Spectrum Pet Care was in talks to merge with Mars, Inc.5 within the next eighteen months;

the bond could be converted into stock prior to a merger with Mars, Inc.;

Spectrum Pet Care was planning an annual meeting in Columbia, Missouri, in December 2008, and invited MR2 to attend;6 and

Renick requested that MC renew the matured bond.

In or around August 2008, MR2 agreed to renew MC’s bond with Spectrum Pet Care.

On or around July 17, 2009, Renick told MR2 that Spectrum Pet Care’s annual meeting would take place at a Marriott Hotel in Columbia, Missouri.7

On or around July 27, 2009, MR2 received a letter from Renick addressed to all “shareholders and bondholders” in Spectrum Pet Care. This letter stated, among other things, the following:

Spectrum Pet Care was introducing a number of new products that had “exceeded our expectations in the marketplace;”

Spectrum Pet Care was issuing new stock in the amount of seven hundred fifty thousand dollars ($750,000) and new bonds in the amount of two hundred fifty thousand dollars ($250,000);

“May I ask that you pass on the enclosed Offering Circular to someone you might know that would be a potential investor in our company? All you have to do is simply pass out the Offering Circular and I’ll do the rest (they can call me anytime with questions). It would be most appreciated;” and

[4] See Paragraph 64, below, which states that during an on-the-record interview of Renick by the Enforcement Section, Renick stated that Spectrum was in “survival mode” during the subject period.

[5] Mars, Inc., is a manufacturer of pet food, including Pedigree, and other products, including M&M’s, Snickers, and Bounty. Mars, Inc., has annual sales ranging up to thirty billion dollars a year.

[7] On November 3, 2010, the Enforcement Section contacted all hotels owned by Marriott located in Columbia, Missouri. A representative of the Courtyard by Marriott said the last meeting held by Renick and Spectrum was in December 2008. No other meeting had been scheduled on behalf of Spectrum at the Courtyard by Marriott.

all individuals were invited to attend an open house in September and the annual meeting in December.8

On or around August 10, 2009, MR2 sent Renick a letter which stated that MC’s renewed bond in Spectrum Pet Care had matured and requested that the bond be paid in full.

On or around December 15, 2009, MR2 sent Renick a second letter which stated that MR2 had not received any response from Renick and again requested that the debt be paid in full immediately.

On or around December 21, 2009, MR2 received from Renick a letter which stated, among other things, the following:

Spectrum Pet Care was working on installing a new gourmet pet food line;

Spectrum Pet Care would like to enter into a payment plan with MC; and

Spectrum Pet Care would pay one thousand two hundred fifty dollars ($1,250) on the first of each month instead of making a full lump-sum payment.

MR2, on behalf of MC, agreed to the payment plan outlined by Renick.

On at least two occasions in 2010, Spectrum Pet Care did not make timely payment to MC pursuant to the payment plan.

In or around July 2010, MR2 told Renick that MR2 contacted the Enforcement Section. Renick offered to pay MC the remaining amounts due on the bond.

On or around December 3, 2010, SPC Brands and Renick sent a letter addressed to SPC Brands shareholders and bondholders to MR2. The letter stated, among other things, the following:

during the week of December 13, 2010, Renick would be in Nashville, Tennessee, to have meetings with Tractor Supply where Renick would “present to [Tractor Supply’s] buyers a complete program on [SPC Brands’] horse treats, dog treats, and cat treats;”9 and

[8] No information was given as to the location or date of the open house or the annual meeting.

[9] The Enforcement Section contacted Tractor Supply. Renick scheduled a meeting with Tractor Supply, but no representative from Spectrum, including Renick, showed up for the scheduled meeting.

a buyer of Circle K contacted Renick to put SPC Brands’ dog and cat treats into three thousand three hundred stores.10

As of the date of this Order, MC has not received the total amount due on the Spectrum Pet Care bond.

In or around December 2007, a seventy-four (74) year-old resident of Kansas City, Missouri, (“MR3”) learned about an investment opportunity with Spectrum Pet Care through an advertisement11 in the Kansas City Star newspaper.

Renick told MR3, among other things, the following:

Spectrum Pet Care was doing “wonderfully” and was growing;

Spectrum Pet Care would be making “novelty things” and would sell them through “Family Dollar and Wal-Mart;”

MR3 would receive a ten percent (10%) return for a fourteen month period; and

all investments made in Spectrum Pet Care would be secured by a UCC filing and a Deed of Trust.

On or around January 1, 2008, MR3 invested twenty thousand dollars ($20,000) with Renick in a Spectrum Pet Care bond.

In or around January 2009, Renick contacted MR3 about renewing MR3’s bond. Renick told MR3, among other things, the following:

if MR3 did not renew the bond, Spectrum Pet Care would have to lay off workers in order to pay MR3;

the terms for the renewed bond included a return of twelve percent (12%) for a twelve (12) month period; and

Spectrum Pet Care was venturing into pet insurance and manufacturing vaccines and medications for pets.

[10] The Enforcement Section contacted Circle K. Circle K has never placed any products in any of its stores, nor has Circle K ever agreed to place SPC Brands’ products in three thousand three hundred Circle K stores.

[11] The Enforcement Section is unsure what specific advertisement MR3 read; however, during the course of its investigation, the Enforcement Section obtained an advertisement that says, among other things, that:

the bonds are fully secured;

interest will be paid monthly;

there is a five thousand dollar minimum investment; and

an investor can earn 8.45% annual percentage yield.

In or around January 2009, MR3 renewed the Spectrum Pet Care bond for an additional twelve months.

MR3 received at least one invitation to a shareholder meeting from Renick. The invitation did not contain the date or location for any of the meetings. MR3 contacted Renick on at least one occasion and was told that the meeting was for shareholders only, and since MR3 was a bondholder, MR3 was not invited to attend the meeting.

MR3 did not complete suitability questionnaires or subscription agreements.

Renick failed to disclose to MR3, among other things, the following:

the risks of the investment;

that Spectrum Pet Care had little revenue from the sale of products;

Spectrum Pet Care’s financial condition;

that some investor money would be used to pay for Renick’s personal expenses;

that some investor money would be used to pay previous investors;

that Spectrum Pet Care was unable to meet its debt service;

that Renick was not registered in the State of Missouri to sell securities; and

that the bond was not registered in the State of Missouri.

On June 14, 2010, MR3 called Renick and requested that MR3’s matured Spectrum Pet Care bond be paid in full. Renick told MR3 that Renick would “take care of it” the same day.

On or around June 22, 2010, MR3 sent Renick a letter requesting that the investment be paid back. The letter stated, among other things, that:

MR3’s money totaling fifty-two thousand two hundred thirty-five dollars and sixty-seven cents ($52,235.67) was due on February 9, 2010;

MR3 had not received any communication from Renick;

MR3 had not received a return on the investment; and

MR3 again requested that Spectrum pay MR3 for the matured bond immediately.

In July 2010, Renick sent a letter to “SPC Brands, Inc., Bondholders and Stockholders.” This letter stated, among other things, the following:

“shares in Spectrum Pet Care, Inc. will be reissued in SPC Brands, Inc. which will own all the assets of Spectrum Pet Care, Inc.;”

SPC Brands will assume all bonds issued by Spectrum Pet Care “and nothing will change including the collateral which backs the bonds;” and

all of Spectrum Pet Care’s “assets, land, buildings, equipment, and such, have been assumed and are now owned by SPC Brands, Inc.”

On July 13, 2010, the Enforcement Section requested banking information from Renick and Spectrum. Renick provided information in response which stated, among other things, that between 2007 and August 2010, Spectrum had accounts at American Bank of Missouri and Bank of America. The Enforcement Section requested bank records for Spectrum and Renick from American Bank of Missouri and Bank of America.

American Bank of Missouri provided records that included an account in the name of Spectrum Pet Care, Inc., and Frank Renick (“Spectrum AB Account”).12 Spectrum AB Account records revealed, among other things, that the following occurred within the account during the year 2009:

the beginning balance was less than two hundred thousand dollars ($200,000);

deposits totaled in excess of two million, one hundred thousand dollars ($2,100,000);13

approximately eight hundred thousand dollars ($800,000) went to companies such as Ford Motor Credit, Dish Network, St. John’s Hospital, and a dermatology office;

in excess of three hundred thousand dollars ($300,000) was paid to Renick and/or members of his family;

in excess of seventy thousand dollars ($70,000) went to Renick Reptiles;

in excess of six hundred thousand dollars ($600,000) was paid to investors; and

the ending balance was approximately three hundred eighty thousand dollars ($380,000).

[13]Upon information and belief, the majority of the deposits represent investor money.

Bank of America provided records that included an account in the name of Spectrum Pet Care, Inc. (“Spectrum BOA Account”).14 Spectrum BOA Account records revealed, among other things, that the following occurred within the account during the year 2009 and the first quarter of 2010:

during 2009, approximately two hundred eighty thousand dollars ($280,000) was deposited;15

in the first quarter of 2010, approximately fifty thousand dollars ($50,000) of investor funds was deposited;

in the first quarter of 2010, approximately one hundred fifty thousand dollars ($150,000) was paid to investors; and

in the first quarter of 2010, payments were made to vendors including Carnival Cruise Line, Direct TV, and FastLane.

On July 14, 2010, Spectrum filed a UCC filing in the State of Missouri. The UCC filing states that “Secured Bondholders of Spectrum Pet Care, Inc.” have a secured interest in “all equipment, parts, and supplies, used for any purpose by Spectrum Pet Care, Inc., its predecessors, successors, and assigns, located at 1000 Lewis Street, Montgomery City, Missouri 63361.”

Prior to July 14, 2010, no UCC filings were filed by Spectrum regarding investors’ interest in Spectrum.

No UCC filings were filed in any investor’s name at the state or Montgomery County levels in Missouri.

On October 14, 2010, the Enforcement Section requested information from Renick and Spectrum. Information provided in response included an excel spreadsheet that indicated that seven hundred (700) investors invested in excess of six million dollars ($6,000,000). The spreadsheet indicated that Spectrum had investors from states including Colorado, Illinois, Kansas, and Missouri.

In or around December 2010, the Enforcement Section asked Spectrum for evidence of sales of Spectrum product. On December 10, 2010, Renick sent to the Enforcement Section copies of sixteen invoices (“Spectrum Invoices”).

The Spectrum Invoices were dated between November 12, 2010, and December 8, 2010, and each of these listed a payment due date of early 2011 for varying amounts.16

From December 17, 2010, to December 20, 2010, an Enforcement Section Investigator contacted some of the distributors to whom the Spectrum Invoices were addressed. The following information was obtained from some of the distributors:

the distributors had not agreed to purchase Spectrum product; and

the distributors had not entered into a selling agreement with Spectrum.

From April 2010 to December 2010, the Enforcement Section conducted interviews of a former Spectrum employee who stated, among other things, the following:

Renick instructed this employee not to pursue sales because mailing the product was too expensive;

Renick instructed employees to tell investors that Renick was working on mergers with larger companies;

Renick instructed employees to tell investors that Renick was trying to get the stock listed on a national exchange;

Spectrum had not received any funds from sales made by distributors during the employee’s tenure;

in or around the fall of 2010, Spectrum had one display at Wal-Mart, but Renick decided to remove the product from Wal-Mart because Renick did not think it was cost effective. Pictures were taken of the display so that Renick could show that Spectrum was trying to make sales in large companies;

Spectrum had little income from sources other than investors during the employee’s tenure;

Spectrum’s overhead expenses were in excess of five thousand dollars ($5,000) a week during the employee’s tenure;

in December 2010, Renick stated that Spectrum had approximately three million dollars ($3,000,000) worth of investments that were about to mature;

Renick recommended that an investor roll over an IRA into Spectrum stock in the amount of eighty thousand dollars ($80,000) in January 2011;

[16] The amount of the Spectrum invoices ranged up to at least twenty thousand nine hundred sixty-six dollars and forty cents ($20,966.40).

Renick was working to raise five million dollars ($5,000,000) in California for the purpose of paying investors who had bonds maturing; and

investors called Spectrum and asked why they were not receiving any returns on their investments as promised.

On December 28, 2010, the Enforcement Section conducted an on-the-record interview of Renick. During this interview, Renick stated, among other things:

Section 409.1-102(1), RSMo. (Cum. Supp. 2009), defines “Agent” as “an individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities or represents an issuer in effecting or attempting to effect purchases or sales of the issuer’s securities. But a partner, officer, or director of a broker-dealer or issuer, or an individual having a similar status or performing similar functions is an agent only if the individual otherwise comes within the term. The term does not include an individual excluded by rule adopted or order issued under this act.”

Section 409.1-102(26), RSMo. (Cum. Supp. 2009), defines “Sale” to include: “every contract of sale, contract to sell, or disposition of, a security or interest in a security for value.” That same section defines “offer to sell” as “every attempt or offer to dispose of, or solicitation of an offer to purchase, a security or interest in a security for value.”

Section 409.1-102(28), RSMo. (Cum. Supp. 2009), defines “Security” as “a note; stock; treasury stock; security future; bond; debenture; evidence of indebtedness; certificate of interest of participation in a profit-sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, option, or privilege on a security, certificate of deposit, or group or index of securities, including an interest therein or based on the value thereof; put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; or in general, an interest or instrument commonly known as a “security”; or a certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

[19] This address is available to all clients who purchase virtual office services from Cloud's Carlsbad, CA, location.

Section 409.3-301, RSMo. (Cum. Supp. 2009), states:

It is unlawful for a person to offer or sell a security in this state unless:

(1)The security is a federal covered security;

(2)The security, transaction, or offer is exempted from registration under sections 409.2-201 to 409.2-203; or

(3)The security is registered under this act.

Section 409.4-402(a), RSMo. (Cum. Supp. 2009), states:

It is unlawful for an individual to transact business in this state as an agent unless the individual is registered under this act as an agent or is exempt from registration as an agent under subsection (b).

Section 409.4-402(d), RSMo. (Cum. Supp. 2009), states:

It is unlawful for… an issuer engaged in offering, selling, or purchasing securities in this state, to employ or associate with an agent who transacts business in this state on behalf of broker-dealers or issuers unless the agent is registered under subsection (a) or exempt from registration under subsection (b).

Section 409.5-501, RSMo. (Cum. Supp. 2009), states:

It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly:

(1)To employ a device, scheme, or artifice to defraud;

(2)To make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it is made, not misleading; or

(3)To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

Section 409.6-604, RSMo. (Cum. Supp. 2009), states:

(a)If the commissioner determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this act or a rule adopted or order issued under this act or that a person has materially aided . . . an act, practice or course of business constituting a violation of this act . . . the commissioner may:

(1)Issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other action necessary or appropriate to comply with this act. ...

(b)An order under subsection (a) is effective on the date of issuance. Upon issuance of the order, the commissioner shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered. The order must include a statement whether the commissioner will seek a civil penalty or costs of the investigation, a statement of the reasons for the order, and notice that, within fifteen days after receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a person subject to the order does not request a hearing and none is ordered by the commissioner within thirty days after the date of service of the order, the order becomes final as to that person by operation of law. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.

(c)If a hearing is requested or ordered pursuant to subsection (b), a hearing before the commissioner must be provided. A final order may not be issued unless the commissioner makes findings of fact and conclusions of law in a record in accordance with the provisions of chapter 536, RSMo, and procedural rules promulgated by the commissioner. The final order may make final, vacate, or modify the order issued under subsection (a).

(d)In a final order under subsection (c), the commissioner may:

(1)Impose a civil penalty up to one thousand dollars for a single violation or up to ten thousand dollars for more than one violation;

(2)Order a person subject to the order to pay restitution for any loss, including the amount of any actual damages that may have been caused by the conduct and interest at the rate of eight percent per year from the date of the violation causing the loss or disgorge any profits arising from the violation;

(3)In addition to any civil penalty otherwise provided by law, impose an additional civil penalty not to exceed five thousand dollars for each such violation if the commissioner finds that a person subject to the order has violated any provision of this act and that such violation was committed against an elderly or disabled person. For purposes of this section, the following terms mean:

(A)"Disabled person", a person with a physical or mental impairment that substantially limits one or more of the major life activities of such individual, a record of such impairment, or being regarded as having such an impairment;

(B)"Elderly person," "a person sixty years of age or older."

(e)In a final order, the commissioner may charge the actual cost of an investigation or proceeding for a violation of this act or a rule adopted or order issued under this act. These funds may be paid into the investor education and protection fund.

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

During the years 2003 to present, Respondents SPC Brands, Spectrum Pet Care, Spectrum Pet Foods, and Renick offered and sold securities as those terms are defined in Sections 409.1-102(26) and (28), RSMo. (Cum. Supp. 2009).

During the years 2003 to present, records maintained by the Commissioner contained no registration, granted exemption, or notice filing indicating status as a “federal covered security” for the investments offered and sold by Respondents SPC Brands, Spectrum Pet Care, Spectrum Pet Foods, and Renick.

In or around April 2011, Respondent CFG and Respondent Renick offered or sold securities as those terms are defined in Sections 409.1-102(26) and (28), RSMo. (Cum. Supp. 2009).

Records maintained by the Commissioner indicated no registration, granted exemption, or notice filing indicating status as a “federal covered security” for the investments offered or sold by Respondent CFG, and Respondent Renick.

Respondents violated Section 409.3-301, RSMo. (Cum. Supp. 2009), when they offered and sold securities in Missouri without these securities being (1) federal covered securities, (2) exempt from registration under Sections 409.2-201 or 409.2-202, RSMo. (Cum. Supp. 2009), or (3) registered under the Missouri Securities Act of 2003.

Respondents’ actions in offering and selling securities that were not registered, exempt or a federal covered security constitute an illegal act, practice, or course of business and thus such actions are subject to the commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

Multiple Violations of Transacting Business as an Unregistered Agent

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

During the years 2003 to present, Respondent Renick offered and sold securities as those terms are defined in Sections 409.1-102(26) and (28), RSMo. (Cum. Supp. 2009).

During the years 2003 to present, records maintained by the Missouri Commissioner contained no registration or granted exemption for Respondent Renick to transact business as an agent in the State of Missouri.

Respondent Renick violated Section 409.4-402(a), RSMo. (Cum. Supp. 2009), when he offered and sold securities to investors in Missouri without being registered or exempt from registration as an agent.

Respondent Renick’s actions in transacting business as an unregistered agent constitute an illegal act, practice, or course of business and thus such actions are subject to the commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

Multiple Violations of Employing an Unregistered Agent

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

Respondents SPC Brands, Spectrum Pet Care, Spectrum Pet Foods, and CFG have not registered any agents in the State of Missouri.

Respondents SPC Brands, Spectrum Pet Care, Spectrum Pet Foods, and CFG violated Section 409.4-402(d), RSMo. (Cum. Supp. 2009), when they employed an unregistered agent who transacted business in the State of Missouri.

The actions of Respondents SPC Brands, Spectrum Pet Care, Spectrum Pet Foods, and CFG in employing an unregistered agent who transacted business in this state constitute illegal acts, practices, or courses of business and thus such actions are subject to the commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

Multiple Violations of Making an Untrue Statement of Material Fact in Connection with the Offer or Sale of a Security to MR1

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

The actions of Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods in making untrue statements of material fact constitute illegal acts, practices, or courses of business and thus such actions are subject to the Commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

Making an Untrue Statement of Material Fact in Connection with the Offer or Sale of a Security to MR2

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

In connection with the offer, sale or purchase of a security by Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods to MR2, Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods made untrue statements of material fact including, but not limited to, that the business would “go public.”

The actions of Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods in making untrue statements of material fact constitute illegal acts, practices, or courses of business and thus such actions are subject to the Commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

Multiple Violations of Making an Untrue Statement or Omitting to State Material Facts in Connection with the Offer or Sale of a Security to MC

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

In connection with the offer, sale or purchase of a security by Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods to MC, Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods made untrue statements of material fact including, but not limited to, the following:

that the bonds were fully secured by “equipment and five acres of industrial property;”20

that Spectrum Pet Care would “go public;”

that a UCC filing would be made in the investor’s name at the state and county levels; or

that Spectrum Pet Care was in talks to merge with Mars, Inc., within the next eighteen months.

In connection with the offer, sale or purchase of a security, Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, including, but not limited to, the following:

that Spectrum was in “survival mode” when Renick told MC that the pet treat business had “exploded” and Spectrum Pet Care could not keep up with demand for the product;

that Renick was not registered in the State of Missouri to sell securities; or

The actions of Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods in making untrue statements and omitting to state material facts constitute illegal acts, practices, or courses of business and thus such actions are subject to the commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

[20] There was no UCC filing at the time of MC's investment and none was made for a period of approximately three years following the investment until July 2010.

Multiple Violations of Making an Untrue Statement or Omitting to State Material Facts in Connection with the Offer or Sale of a Security to MR3

Paragraphs 1 through 81 are incorporated by reference as though fully set forth herein.

In connection with the offer, sale or purchase of a security by Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods to MR3, Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods made untrue statements of material fact including, but not limited to, the following:

that Spectrum Pet Care would be making “novelty things” and would sell them through “Family Dollar and Wal-Mart;” or

that all investments made in Spectrum Pet Care would be secured by a UCC filing and a Deed of Trust.

In connection with the offer, sale or purchase of a security, Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, including, but not limited to, the following:

that Spectrum was in “survival mode” when Renick told MR3 that Spectrum Pet Care was doing “wonderfully” and was growing;

the risks of the investment;

that Spectrum Pet Care had little revenue from the sale of products;

Spectrum Pet Care’s financial condition;

that some investor money would be used to pay for Renick’s personal expenses;

that some investor money would be used to pay previous investors;

that Spectrum Pet Care was unable to meet its debt service;

that Renick was not registered in the State of Missouri to sell securities; or

The actions of Respondents Renick, SPC Brands, Spectrum Pet Care, and Spectrum Pet Foods in making untrue statements of material fact constitute illegal acts, practices, or courses of business and thus such actions are subject to the commissioner’s authority under Section 409.6-604, RSMo. (Cum. Supp. 2009).

This order is in the public interest and is consistent with the purposes of the Missouri Securities Act of 2003. See Section 409.6-605(b), RSMo. (Cum. Supp. 2009).

IV. ORDER

NOW THEREFORE, it is hereby ordered that Respondents, their agents, employees and servants, and all other persons participating in or about to participate in the above-described violations with knowledge of this order are prohibited from:

violating or materially aiding in any violation of Section 409.3-301, RSMo. (Cum. Supp. 2009), by offering or selling any securities as defined by Section 409.1-102(28), RSMo. (Cum. Supp. 2009), in the State of Missouri unless those securities are registered with the Securities Division of the Office of the Secretary of State in accordance with the provisions of Section 409.3-301;

violating or materially aiding in any violation of Section 409.4-402(a), RSMo. (Cum. Supp. 2009), by transacting business as an unregistered agent;

violating or materially aiding in any violation of Section 409.4-402(d), RSMo. (Cum. Supp. 2009), by employing an unregistered agent; and

violating or materially aiding in any violation of Section 409.5-501, RSMo. (Cum. Supp. 2009), by, in connection with the offer or sale of securities, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading or engaging in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

IT IS FURTHER ORDERED that, pursuant to Section 409.6-604(d), RSMo. (Cum. Supp. 2009), the Commissioner will determine whether to grant the Enforcement Section’s petition for an imposition of a civil penalty of up to ten thousand dollars ($10,000) against each Respondent for multiple violations of Section 409.3-301, RSMo. (Cum. Supp. 2009), in a final order, unless Respondents request a hearing and show cause why the penalty should not be imposed.

IT IS FURTHER ORDERED that, pursuant to Section 409.6-604(d), RSMo. (Cum. Supp. 2009), the Commissioner will determine whether to grant the Enforcement Section’s petition for an imposition of a civil penalty of up to ten thousand dollars ($10,000) against Respondent Renick for multiple violations of Section 409.4-402(a), RSMo. (Cum. Supp. 2009), in a final order, unless Respondent Renick requests a hearing and shows cause why the penalty should not be imposed.

IT IS FURTHER ORDERED that, pursuant to Section 409.6-604(d), RSMo. (Cum. Supp. 2009), the Commissioner will determine whether to grant the Enforcement Section’s petition for an imposition of a civil penalty of up to ten thousand dollars ($10,000) against each of Respondent SPC Brands, Respondent Spectrum Pet Care, Respondent Spectrum Pet Foods, and Respondent CFG for multiple violations of Section 409.4-402(d), RSMo. (Cum. Supp. 2009), in a final order, unless Respondent SPC Brands, Respondent Spectrum Pet Care, Respondent Spectrum Pet Foods, and Respondent CFG request a hearing and shows cause why the penalty should not be imposed.

IT IS FURTHER ORDERED that, pursuant to Section 409.6-604(d), RSMo. (Cum. Supp. 2009), the Commissioner will determine whether to grant the Enforcement Section’s petition for an imposition of a civil penalty of up to ten thousand dollars ($10,000) against Respondent SPC Brands, Respondent Spectrum Pet Care, Respondent Spectrum Pet Foods, and Respondent Renick for multiple violations of Section 409.5-501, RSMo. (Cum. Supp. 2009), in a final order, unless Respondent SPC Brands, Respondent Spectrum Pet Care, Respondent Spectrum Pet Foods, and Respondent Renick request a hearing and shows cause why the penalty should not be imposed.

IT IS FURTHER ORDERED that, as the Enforcement Section has petitioned for an order of restitution, the Commissioner will determine whether to order Respondents to pay restitution for any loss, possibly to include the amount of any actual damages that may have been caused by the conduct of Respondents, and interest at the rate of eight percent per year from the date of the violation causing the loss, or disgorge any profits arising from the violation of Sections 409.3-301, 409.4-402 and 409.5-501, RSMo. (Cum. Supp. 2009), after review of evidence submitted by the Enforcement Section, in a final order, pursuant to Section 409.6-604(d), RSMo. (Cum. Supp. 2009), unless Respondents request a hearing and show cause why this restitution or disgorgement should not be ordered.

IT IS FURTHER ORDERED that, as the Enforcement Section has petitioned for an award for the costs of the investigation against Respondents in this proceeding, the commissioner will issue a final order, pursuant to Section 409.6-604(e), RSMo. (Cum. Supp. 2009), awarding an amount to be determined after review of evidence submitted by the Enforcement Section, unless Respondents request a hearing and show cause why such award should not be made.

SO ORDERED:

WITNESS MY HAND AND OFFICIAL SEAL OF MY OFFICE AT JEFFERSON CITY, MISSOURI THIS 19 TH DAY OF MAY, 2011.